April 2021 to March 2022

Motohiro Tsuchiya  (Senior Institute Member, Keio University Global Research Institute）
Koichiro Komiyama  (Visiting Scholar, Keio University Global Research Institute）
Izumi Harada  (Executive Fellow, Institutes for International Socio-Economic Studies）

   In the current post-Trump era, while the effects of the coronavirus pandemic are still being felt, the Biden administration in the United States has shifted towards a policy of international cooperation, but there has been basically no change in the battle for supremacy between the U.S. and China. This leaves Japan facing the challenge of how to soften the hegemonic struggle between the United States and China while striking an appropriate balance between economic security and economic exchange with China and curbing the impact of this struggle. 

   For Japan’s economy and industry, it is also important that urgent steps are taken to improve our cyberattack defenses, and to strengthen our economic resilience and competitiveness in the development of advanced technologies. Japanese entrepreneurs should not get cold feet during this U.S.–China confrontation but should closely follow the U.S. policy toward China and its evolution over time, maintain a keen interest in the Chinese political situation, markets and industry, build businesses in China from a long-term perspective, and enhance their own capabilities. 

   In doing so, we must be firmly aware that if we take an overly broad definition of economic security and continue with our policy of only making vague contributions to discussions, we may lose sight of cost-effectiveness and undermine our national interest to the detriment of Japanese companies in the arena of international competition. We should instead ascertain how Japan’s national interests and security can be aligned with the prevailing circumstances, and proceed carefully with various measures in accordance with the principles of upholding freedom and democracy and the rule of law, while being mindful not to excessively impede the free economic activity that is the foundation of democracy. 

   Rather than prevaricating over whether to choose sides with the U.S. or China, the important thing for Japan to do is secure a sufficient degree of strategic autonomy so that we are not excessively dependent on other countries, and acquire, maintain and strengthen a position of strategic indispensability to enhance Japan’s world standing. Japan must also exercise diplomatic leadership in its economic and business dealings with the U.S. and China with the aim of bringing about reconciliation between the two countries. 

   In this study, based on the above basic understanding, we considered the future direction of Japan and Japanese companies.